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Ask the Tutor ACCA SBR

Employee benefits

RRashard5y ago
Hi Chris/ Stephen, How is the pension liability calculated? In the Kaplan book it is given salary at retirement * (no.of years worked/60 years) and discounted to PV. So the calculations are done when the employees leave the company? If so, how does it change the value of obligations when a curtailment occurs?
stephenwidbergstephenwidbergTutor5y ago#1
Actuaries do all horrid calculations. If Q says that the liability goes up or down by 10 because of curtailment, treat it like any other service cost: Dr or Cr P&L Dr or Cr Liability.
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